Recovery of $200b: FBR experts to visit Switzerland next month

ISLAMABAD: A team comprising FBR experts will visit Switzerland next month to plead with Swiss authorities the return of untaxed billions of dollars of Pakistanis stashed away illegally.

According to Finance Minister Ishaq Dar, the FBR team would visit Switzerland in the third week of August.

Dar said that he had already got approval from the cabinet to formally initiate negotiations with the Swiss authorities for possible recovery of billions of dollars belonging to Pakistanis in offshore accounts.

The finance minister explained that it was a lengthy process and might take a few years. It is assumed that Pakistani nationals have over $200 billion stashed away in Swiss banks. One of the directors of Credit Suisse AG Bank has stated on record that $97 billion from Pakistan is deposited in his bank.

Similarly, Micheline Calmy-Rey, the then Swiss foreign minister, is reported to have put the figure of Pakistani money hidden in Switzerland at $200 billion — a statement that has not been contradicted.

The government will seek help through the new Swiss laws to exchange confidential information about the ill-gotten monies stashed away in Switzerland’s banking system. Under a new law, known as The Restitution of Illicit Assets Act 2010 (RIAA), the Swiss government allows the exchange of confidential information about the money deposited in its banks.

A summary was placed before the federal cabinet seeking its approval to renegotiate the existing (deficient) Pakistan-Switzerland Tax Treaty, which was approved in September 2013. Dar was recently quoted to have told parliament that the Swiss authorities had expressed its willingness to renegotiate the current Pak-Swiss agreement.

Pakistan’s DTA with Switzerland, signed in 2005 and enforced in 2008, does include Article 26, which creates an obligation to exchange information relevant to the correct application of tax treaties.

Pakistan would have to prove that the money deposited in Swiss banks by its nationals is untaxed following which without compromising the confidentiality of its clients, the payable tax money could be deducted from such accounts and provided to the Government of Pakistan.